Now you can trade bonds with the professionals

Investors are being invited to lend money to companies. We look at the risks involved

Investors will be able to trade corporate bonds in the same way as the professionals for the first time from tomorrow.

The London Stock Exchange (LSE) will launch an electronic trading system allowing investors to buy and sell corporate bonds in £1,000 chunks without having to pay high fees to brokers.

Corporate bonds - debt issued by companies, which pay a fixed amount of interest over a set number of years - have traditionally been the preserve of institutional investors because of the minimum investments involved, usually between £50,000 and £100,000.

Manchester United FC, for example, recently issued bonds promising to pay 8.5% for seven years. However, the minimum investment was £50,000.

Private investors usually have to buy through bond funds instead, which typically cost about 1.25% to 1.5% a year. This erodes one of the key benefits - fixed income.